Vinod Rai is not just an accountant

Book Review: Non-fiction/Not Just an Accountant: The Diary of the Nation’s Conscience Keeper by Vinod Rai, Rupa, 267pp; Rs500 (Hardback)

Vinod Rai is not just accountant – he is an impulsive writer too who writes diary to keep the conscience of the nation, as confirmed by him through the title of his truly sensational book. He has been a newsmaker even before publicly turning a diarist, unlike Anne Frank who could put forth her jottings only for invisible readers away from Nazi Concentration Camp.

Comparisons between the authors are like chalk and cheese, but one feature is strikingly common: both resisted the extreme tendencies of a ruling regime even though in different time, characteristics and conditions.

When the reader finishes Rai’s book, it is hard to miss the feeling that this account was written to contest former Prime Minister Manmohan Singh’s silence when the UPA-II government was limping from one scam to another. At peak of those free-wheeling scam days, Prime Minister Singh stated: “I honestly believe that history will be kinder to me than the contemporary media. I feel somewhat sad, because I was the one who insisted that spectrum allocation should be transparent, it should be fair, it should be equitable. I was the one who insisted that coal blocks should be allocated on the basis of auctions. These facts are forgotten.”

The nagging question is, how kinder history would be to Manmohan Singh. Rai, who scrutinized the government’s performance in those scam years as the Comptroller and Auditor General (CAG), obviously thinks that the then Prime Minister’s silence and apparent inability to prevent those scandals were a giveaway. By sharing the clue in glaring details, he probes why India’s thriving telecom business will be in mess after a shady allocation of spectrums right under the nose of Prime Minister’s Office (PMO).

The earlier press coverages on the whole mess and now this book give enough indications for Mr. Singh to come forward and reciprocate with his autobiography in no time, where he could make a stand clear about the lapses happened during his stint. After reading Rai’s book, one concludes that this is a good way for the former Prime Minister to redeem himself if he wants to get history’s judgment.

Rai examined the inappropriateness in the allocation in 2G telecom licenses and coal mines, both of which defrauded government money. This book documents all his findings, which show the then PM was not clueless of what was going around him. But he did little to stop the misuse of power, and no damage control was attempted. That was a scandal of its own. The scars of those scandals tainted not only his government, but himself, too.

Rai reminds that through a piece of his communication with PMO: “You (Manmohan Singh) engaged in a routine and 'distanced' handling of the entire allocation process, in spite of the fact that the then Communications Minister A Raja had indicated to you, in writing, the action he proposed to take. Insistence on the process being fair could have prevented the course of events during which canons of financial propriety were overlooked, unleashing what probably is the biggest scam in the history of Independent India.”

These few lines are enough to establish a policy decision like spectrum licensing could not be made without having green signal from the country’s highest office, PMO – also that the role of PM should not be reduced to a passive by-stander. Therefore, even though Singh is still considered a man of high integrity, his tenure as India’s chief executive was feckless and tame. That is the damning impression Rai's book conveys.

K Natwar Singh’s One Life is not Enough,TSR Subramanian’s India at Turning Point,Bimal Jalan and P Balakrishnan’s(ed) Politics Trumps Economicsand Sanjay Baru’sThe Accidental Prime Minister are the prominent critiques of the UPA government. Now, Rai's book adds to the wealth of uncomfortable truths about the UPA's 10-year rule.

Making predicament more obstinate, the hibernation is prolonging inside the Congress Party. Its old or new school lieutenants are lost without causes – having been not known to live in opposition, they seem loosing their edge with pen and mind as well.

So, let’s hope more such unfriendly books about the yore days – and all those to be not answered from privileged heads of India’s oldest party, now marginalised below the ground. An accountant could be an effective multi-tasker, Rai has proved it. To know the capital trails, this book too would be in essential list!
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

Making 'Un-Planning' Commission - Is it a Viable Proposition?

Bibek Debroy’s piece in The Economic Times, mentioned an unheard term - ‘un-planning' - while contesting the relevance of planning in India. This ‘un-planning’ commission, according to him, would be the replacement of the existing Planning Commission with a different nomenclature – However, he supplied no further details, about how this new institution would function.

Thus one could reckon that he too lacks information - if not the understanding - about the new think tank, in which he will probably have some major say. Debroy has been assessing governments since their early days – from UPA -I at the centre, JD (U) in Bihar, TMC in West Bengal and now to the new BJP government at the Centre. Nothing is really unusual about it.

But Indian polity is evidently in the midst of a tectonic shift, where the government is planning policy bereft of the fixed intellectual convictions of a select few, and the scheduled, fleeting cheers by related stakeholders. So, this process of ‘disillusionment’ is likely to stick amongst policy experts, who consistently spend their time and energy in channelising the interface between politics and economics – and that too in hope reciprocation from the power the seats of power.

In his piece, Debroy has articulated that the Planning Commission lost its shine soon after the 2nd Plan – even someone who is not a blind believer in the free-market - will not hold exception to this. Indeed it is true, Planning Commission turned sharply pro-Congress after the 2nd Plan and even more so in 1970’s. The aggressive control the it inadvertently had over the government and its functioning severely attacked its autonomy.

Hence, not only did the irrational annual plan discussions and the misuse of entitlements by the established cohort of cliques survive, they thrived. Moreover, what made matters worse for the Planning Commission were the falling standards of research inputs, relying too much on studies from questionable sources and being unable to competitively come to terms with the realities faced by the implementing ministries.

Somewhere along this process, the federal spirit suffered the most, and any exercise aimed at introspection disappeared from the central government. Although, now when the Planning Commission is supposed to be replaced with a new institution, which is predicted to possess a higher propensity to support the economic reforms – it would be worthwhile would be for the new government at the Centre to remember that 'planning', per se, cannot ever be irrelevant for any set of systems.

Hence, scrapping the institution merely for the sake of scrapping it hardly makes any sense. What would be the best policy correction, however, is to restructure it in tandem with the requirements of the present and the future, and to ensure that the overhaul retrieves the transparency and the efficiency losses. The UPA-I&II miserably failed in even acknowledging the ills of the Planning Commission, let alone making any effort in improving its working.

That being said, the new government has a fair opportunity to make the improve the Planning Commission by introducing some much needed changes related to the states, funds allocations, and its internal working mechanism. But instead imbibing those changes, which would have made it accountable to the ‘federal spirit’ – the decision of simply removing it does not bode well beyond enthusing momentous cheers for ‘name change’ and letting the opportunity of a ‘spirit change’ pass.

It is intriguing that so far the new institution, as it stands proposed, is not supported by any important details within the public domain (although the speculative news stories of the leading dailies are making rounds and being proved wrong simultaneously). The Planning Commission was moulded to define our economic goals in post-independence India. Except in odd patches, all it did was try and align the political goals with the social and economic aspirations of a new India.

The intent behind making Planning Commission prominent was not mala fide and with an alarming increase in income disparities, which continues to grow – it would be of grave concern if an institution such as itself ceases to exist altogether.

Through all one may gather about the new institution through public sources – this one will differ in functioning with the existing secondary and tertiary national planning processes which were aimed at handling the plan process and funding between the finance ministry and various other ministries, and between the centre and the states.

Most likely, the new body will have no overseeing authority to evaluate the quality of programme implementation and hold consultations with the government to ideate on the same. So, contrary to generic criticism, the fact is that the Planning Commission, while having the right to mediate between the centre and the state, is notionally not against the federal structure of the country.

Wherever it faltered, the blame was erroneously attributed to its structure and it would have been much better if the practices under the aegis of the central government and other stakeholders had been brought under due scrutiny.

The level of performance varies and is influenced by many factors and if the new institution in the offing can set things right, there is no reason why the Planning Commission cannot be rebuilt. Simply pronouncing capital punishment for a few wrongs should not be confused with the idea of justice.

If the central government is really serious about strengthening the federal structure and empowering states – then it should first make space for wider consultations on crucial issues like this. Simply relying on new media and discussing a policy issue as serious as this in open forum could be seen as anything, but a practical step.

The concept of maximum governance is praiseworthy but only if it also optimizes the government, as the government has to continue playing its essential role.

In the past, we have seen the names of our metropolitan cities change in the pursuit of tempering significant historical realities and respecting legacies. By scrapping the Planning Commission in one go, it seems one more such mistake is going to be committed in India's policy spectrum.
-Atul K Thakur
Email: summertickets@gmail.com
(Published in INCLUSION)

UPA plays the numbers game

P Chidambaram may have shown his articulate command over pure economics and political economy, time and again. But his understanding hasn't led to the enhancement of the country’s macro-economic health
The recently presented interim Union Budget is skewed. The Vote on Account gives no space to overhaul the revenue or expenditure sides, and its provisions will haunt the successive Government as the latter seeks to review or implement policy. The last Union Budget of UPA2 lacks serious intents of fiscal consolidation.

The Union Minister for Finance spent his precious time personifying the achievements of his Government as well as his personal wisdom. Unrelated to Indian economy’s woes, the statements irritated the sufferers of the UPA’s macro-economic mismanagement.

The Indian economy has been passing through trying times, with the GDP growth sliding below five per cent and inflation hovering around 7.5 per cent. Consumer price inflation, which affects the common man the most, has been around 10 per cent or more. And food inflation rarely climbs down from the double-digits. Industrial and services growth has dropped and jobs have withered away from the scene. Naturally, the slowdown created by different factors constituted in a big way to the anti-Government mood among the masses.

An election is around the corner and the legions of the UPA have no proper ideas to curb bad governance. They could have moved to the better path when Congress vice president Rahul Gandhi admitted the policy blunders of his Government, but sadly the Prime Minister and the Finance Minister observed that history will be kinder to them than their contemporary critics. Will this be true?

It is unlikely that any proper history-writing will let off the UPA2, characterised by scams and indecision which have lowered the morale of the economy and the people. Recent years have witnessed an erosion of confidence in economic activities at the mass level. The sagging sentiment has taken a high toll on the growth momentum.

UPA2 couldn’t live up to the benchmark set by UPA1. The excuse of the Finance Minister that it still performed better than the six years of NDA rule is an eyewash through data. In the NDA Government, average GDP growth rate and inflation stood simultaneously at six per cent and around 4.5 per cent. Under UPA1, average GDP growth shot higher at 8.4 per cent but inflation too rose to 6.6 per cent, and UPA2 ends with an average GDP growth of 6.7 per cent and inflation surging over eight per cent.

Astonishingly, the UPA2 has no patience to recall the good work of its own preceding Government. Instead it is comparing its performance with the NDA Government even though the fundamentals for it were different compared to the previous decade which was known for the rise of emerging economies like India.

It is undeniable that the global economic crisis of 2007-2008 messed-up the external environment. The economic slowdown has severely damaged the rising momentum in emerging economies but India has suffered more through the sustained high inflation, supported by impractical policy planning.

The UPA’s much celebrated commitment to inclusive growth made on modest gains on the ground. In 2003-2004, Gross Tax Revenues stood at 8.8 per cent of GDP — this figure witnessed a vertical growth under UPA1 to 12 per cent of GDP in 2008-2009 but came down dramatically to near 10 per cent of GDP under UPA2. Capital outlay and subsidies have modestly risen under the UPA rule but whether the funds were delivered for intended purposes remains a concern.

On the public expenditure front, the NDA Government spent around 2.6 per cent and one per cent of the GDP, respectively on education and health. Under the UPA rule, total public expenditure on education and health, respectively stood at 3.3 per cent and 1.3 per cent of the GDP. This clearly marked the violation of Common Minimum Programme of the UPA1 Government, which had promised spending six per cent of GDP on education and three per cent of the GDP on health facilities.

Mr P Chidambaram, who has presented many Budgets, failed to clean up the indirect taxation regime since 1991. Only Messrs Manmohan Singh and Yashwant Sinha, as Finance Ministers, tried to reform import duties and excise. So, Mr Chidamabaram’s claim to be a progressive mover of the public finances seems unbelievable. This last one was an interim Budget and he may have bound by electoral compulsions but the same was not true in previous years.

The interim Budget estimates fiscal deficit for 2013-14 at 4.6 per cent of the GDP, over-performing the target of 4.8 per cent of the GDP and projects next year’s deficit at 4.1 per cent, again better than the projected 4.2 per cent. But these do not including the pain of carrying revenue deficit at 3.3 per cent.

Time and again, Mr Chidambaram has shown his articulate command over pure economics and political economy. However, his understanding hasn’t translated in macro-economic health of the nation.
-Atul K Thakur
Email: summertickets2gmail.com
(Published in The Pioneer on February25,2014)